Business payments

In our financing arrangement, a "Business payment" refers to the periodic amounts that Businesses pay back based on the terms of the agreed payment plan.

Payment calculation process

Payments are calculated on a continuous cycle, typically aligned with the Platform's payout processes. The amount each Business needs to pay is determined as a percentage of their sales from that period, ensuring that payments adjust according to the Business's sales performance. This percentage is agreed upon when the financing Offer is accepted.

Payment processing methods

We offer three methods for processing payments:

Option 1: Sales statements flow (Platform-managed)

In this flow, Platforms transmit Sales statements (post Add Sales statements to a batch) for each cycle to finmid using a unique identifier for the Business. In response to the Sales statements shared with finmid, our API informs the Platform of the amount to be deducted for the payment and the commission to be retained by the Platform.

Platforms deduct the agreed percentage directly from the Business's sales before disbursing the remaining funds. We offer automated emails for accounting teams to confirm the transaction details and the amounts to be transferred to us on a regular basis (at least monthly).

Option 2: Payment reporting flow (Platform-managed)

In this flow, Platforms report already-collected payments directly to finmid. The Platform collects the payment percentage from Business sales and reports these payments to finmid in batches (post Report Payment), identified by a batch_id representing a payment period, market, or other grouping.

Platforms can report multiple payments for the same batch, and all reported amounts are accumulated. After reporting payments, Platforms can retrieve aggregated batch information (get Get Payment batch) including total payment amounts and platform commissions per Funding.

When using the Payment reporting flow, finmid provides webhooks to keep the Platform informed about payment collection status:

• capital_funding.collection_enabled - Triggered when finmid enables payment collection for a Funding.
• capital_funding.collection_suspended - Triggered when finmid suspends payment collection for a Funding.
• capital_funding.collection_updated - Triggered when the payment percentage or outstanding amount changes.

Based on the data from the webhooks, Platforms can calculate payment amount any time, using the following formula:

payment_amount = min(payment_percent × total_sales_amount, outstanding_amount)

Option 3: Direct debit by finmid

Alternatively, we directly debit the payment from the Business's bank account. This method simplifies the process for Platforms, as we handle the collection and subsequently share the commission with the Platform on a monthly basis. However, this process adds more overhead for the Business and collection risk for finmid, which increases the overall fees for the financing.

With continuous performance on payments, Businesses are eligible to renew their Funding. We will elaborate on this in the next section.